High Probability ETF Trading: 7 ETFs You Need to Know for Monday (USO, OIL, DBO, JNK, HYG, EWJ, FXI)
Heading into trading on Monday, many of the most oversold exchange-traded funds are related to the energy market. Three such funds are among our 7 ETFs You Need to Know here at the beginning of the week.
Although the U.S. remains exceptionally overbought, markets around the world have shown some potential for weakness, particularly those country funds with exposure to Asia.
Here are 7 ETFs You Need to Know for Monday.
Pulling back into oversold territory above the 200-day moving average as of Friday’s close were two major oil commodity funds: ^USO^ and the ^OIL^ (below)
OIL has closed lower for three out of the past five trading days. The ETN is at its most oversold since rallying back above the 200-day in late November.
With 7 professional, quantified trading strategies for trading both bull and bear markets, High Probability ETF Trading by Larry Connors and Cesar Alvarez was voted one of the top 10 trading books of 2009 by SFO Magazine. Click here to find out why.
Also oversold above the 200-day are shares of the ^DBO^.
High yield bonds, referred to last week as a “sweet spot” by Goldman Sachs analysts, have also become increasingly oversold in recent days. Two options for high probability traders include the ^JNK^, which has closed in oversold territory, and the ^HYG^ (below).
Shares of HYG have closed lower for two out of the past three days heading into Monday’s open.
Neither the ^EWJ^ nor the ^FXI^ (below) have pulled back into oversold territory, but both ETFs are close and could be trading at oversold levels by midweek if selling resumes.
The FXI has not been in oversold territory above the 200-day since before the Thanksgiving holiday.
Markets only move in three directions: up, down and side to side. Click here to learn why combining quantified mean reversion (pullback) strategies with quantified trend following strategies can be an excellent way for traders and investors to put money to work in all of all market conditions.
David Penn is Editor in Chief of TradingMarkets.com